Race for The White House: What The Ad Industry Faces

The uncertainty about the final outcome of the race for the White House is a temporary situation. But the condition that resulted in delayed and confused results may have a more lasting impact on what advertising, media, marketing and technology businesses face over the next four years. While Republican and Democratic partisans dig in until the final votes are counted and battleground states are called for one candidate or the other, Adweek editors checked in with observers across a variety of business segments to get a sense of what impact a reelected Trump or incoming Biden administration would have on the regulatory and cultural environment of companies and consumers. —David Kaplan Here's how the results will play out in five key industries: 1. Media: a regulatory reckoning Whether it's Biden or Trump, the next president will bring immediate consequences for the media industry, particularly when it comes to tech regulation. Twitter and Facebook called out baseless posts from Trump starting in the wee hours after polls closed. Of the two, Twitter went further, labeling five of the president's tweets as misleading today. If he stays in office, expect social platforms to continue to crack down on inaccurate tweets from the White House and Trump's camp to keep raising the issue of political bias in social platforms. If Biden wins, he'll be pressured to hold social media companies to account for any knowing spread of misinformation. And either way, lawmakers from both sides will sharpen their scrutiny of how Silicon Valley tech firms handle information. Trump has waged war on the press with unyielding energy. A Biden win would calm those waters. But publishers will have to reflect on their efficacy. “The question is, what did we really accomplish as the press?” media analyst Thomas Baekdal told Adweek. “If [the election] is this close, it means that none of our ‘holding Trump to account’ had any impact.” Another consideration for media: how a less polarizing climate under Biden could affect booming subscription businesses. A cohort of paying consumers will surely continue supporting news brands as a political act. But the intensity of their motivation may dim, particularly if economic burdens remain crushing. —Lucinda Southern 2. TV news heading for post-election malaise Trump often likes to predict that cable news ratings will plummet when he’s no longer in office. But the truth is that no matter which candidate is ultimately elected president, the TV industry will mourn the end to the influx of ad revenue and record ratings that it enjoyed during this election cycle. Those numbers represented a much-needed lifeline in what had been an increasingly challenged landscape for years. The three top cable news networks—Fox News, CNN and MSNBC—all had their most-watched quarters ever this year. About $380 million was spent on TV national advertising for political ads in 2020, according to Media Radar—not only on broadcast and cable news, but also networks like HGTV, Food Network and Adult Swim. As that ad revenue dries up, networks will be hard-pressed to find replacement options during the pandemic, which has sent bottom lines plummeting. Meanwhile, if Trump doesn’t win reelection, there are rumors he could disrupt the industry by launching a conservative network rival to Fox News. Bring it on, Fox Corp CEO Lachlan Murdoch told investors Tuesday: “We love competition. We have always thrived with competition.” —Jason Lynch 3. Brands plot their next move Luckily for marketers, dealing with uncertainty has become de rigueur in 2020. Thank the Covid-19 pandemic for that built-in stress response. Brands are contemplating just what is the right messaging tone consumers will respond to whether it’s a continuation of the Trump era or the introduction of a Biden reign. Kate Muhl, a cultural and consumer insights analyst at Gartner, said brands will still likely skew to the left in their messaging. Considering the sheer numbers, it makes sense: After all, Biden is considered likely to win the popular vote, just as Hillary Clinton did before him. "The way that that we market has to be based on what we understand about the people we're trying to reach," said Muhl. "For a big, mainstream brand, you probably need to continue to lean a little more toward kind of left-leaning values, even if Trump is reelected. You're still trying to talk to somebody at the shelf, not the voting booth." The travel sector may face a tougher period initially if a Biden administration issues more stringent lockdowns and orders tougher social distancing measures. But if the pandemic ebbs more quickly in response to a national approach, domestic travel and hospitality may rebound faster and capitalize on pent-up demand. For Muhl, the fallout from the health crisis and the concomitant economic strife will loom larger over brands than the name of the U.S. president. "The larger cultural moment that we're in with the pandemic is really putting so much pressure on consumers," said Muhl. "A lot of baseline things that are really impacting consumer spending and their overall economic confidence, those aren't going to go away based on who is declared a winner here." —Diana Pearl 4. Agencies must stitch together the red and the blue Regardless of the final winner, you can expect ad agencies to position themselves as partners that can help brands bridge the stark divide in U.S. culture. "If nothing else, the closeness of the election and massive turnout has reinforced the desire for Americans of all political persuasions to be listened to and heard," said Emma Montgomery, co-chief strategy officer of TBWA\Worldwide. "When you look at the map of the country—and the blend of blue and red districts within bordering counties and within states—it shows just how distinct needs and expectations are." For politicians and corporations alike, Montgomery said, "It seems this is a wake-up call for all to better listen to and understand their audiences in order to better serve their needs." Similarly, Michael Roth, CEO of agency holding company IPG, today on LinkedIn urged a focus on shared values that transcend political affiliations. "When we are very different—in terms of our backgrounds or our politics—we can still find common ground," he wrote. "These commonalities can help us bridge gaps and bring the best of our selves to work and to our interactions each day. " Greg Hahn, co-founder of agency Mischief USA and a former creative chief at BBDO New York, said a Biden win could certainly reduce the daily stress level of the liberal-leaning creative departments at many agencies. But he said it's also important to recognize that Americans are emotionally frayed and might be looking for marketing that distracts from politics rather than leaning into the partisan divide. "Whoever wins, we've been under stress and this ambient tension for the past four years. I think people just want relief," Hahn said. "I just feel America is exhausted, and advertising needs to understand that and give people something they're not getting from the rest of the culture." “Regardless of who wins the presidency, brands and marketers will start making plans of when to let go of holding onto the marketing 'pause button,'" added Stacy DeBroff, CEO of Influence Central. "During this time of a highly polarized political and social environment, economic disruption, accelerated ecommerce transformation and supply-chain disruptions, brands have been reticent to spend brand marketing dollars. Key to brands’ decision-making will be getting Covid under control and reinvesting government money into consumers' lives and business recovery—and each candidate for the presidency has dramatically differing views of how to approach these issues.” Another consideration for agencies: Watch for the new privacy wars. Jay Pattisall, a principal analyst at Forrester that focuses on the advertising and marketing industries, said a prospective Biden administration would likely establish a federal approach to data privacy for marketing. “Any such move would be welcomed by agencies as the 4A’s and ANA have both advocated for such a national approach,” he explained. Additionally, Pattisall said that advertising agencies may need to rethink their use of freelance resources if Biden wins. The former vice president has called for an “increase in the minimum wage and signaled a more progressive approach to labor laws.” Essentially, Biden wants to increase protections and benefits for freelancers, but some have voiced concerns that this will make it harder for them to find work. —David Griner and Minda Smiley 5. Ad tech M&A frenzy expected before January Uncertainty is the nemesis of deal making. As doubt remains over the winners of the 2020 presidential and congressional races, questions loom over ad tech’s M&A landscape. Take the prospect of a Biden presidency and its reported capital gains tax policy. Would Biden’s proposals be considered less business-friendly to those of Trump? Would the thought of a new president prompt an end-of-year deal frenzy before the Democrats retake the Oval Office? Many sources Adweek has spoken with already expect to see a number of highly priced exits before the end of the year. In short, the view can be summarized as “cash-out quick before the tax man will take the bulk of your earnings.” However, Terence Kawaja, CEO of ad tech’s most eminent investment bank, Luma Partners, offered a more considered take. “I actually don't think it has that big of an effect on deal markets,” he said. “The markets don't like uncertainty. So, we're going to want to get this [election result] resolved sooner rather than later.” The ideal outcome for the deals market would be “split government” as “it’s more predictable,” according to Kawaja. “Look at the TikTok situation under Trump,” he told Adweek. “While taxes would stay low, there’s an unpredictability factor with him that I think would be diminished under Biden. In general, I would say businesses would like to see a Biden presidency and a Republican Senate because that just means we’re going to get less government.” —Ronan Shields

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How a Biden or Trump Win Could Reshape Marketing, Media and Ad Tech

Adweek editors look at what the future might hold for 5 industries

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